Category: Economy

Council Narrowly Overrides Mayor’s Veto of COVID-19 Relief Bill

District 7 council member Andrew Lewis voted to uphold Mayor Durkan’s veto

By Erica C. Barnett

The Seattle City Council voted to override Mayor Jenny Durkan’s veto of legislation to provide $86 million in immediate economic relief to renters, small businesses, people experiencing homelessness, and other people impacted by the COVID-19 pandemic and the resulting economic downturn, then voted to swap the original bill for a scaled-back version that will spend $57 million instead.

The legislation Durkan vetoed and the replacement ordinance would authorize the use of two city reserve funds to pay for COVID relief, and replenish those funds using proceeds from the JumpStart payroll tax, which kicks in next year. “We are just using a portion of the dollars that we’re collecting, with a certainty that we will be able to replenish the dollars,” council member Teresa Mosqueda, who sponsored the original legislation, said.

Durkan’s office said the mayor was still “evaluating” the legislation and had not decided yet whether she would veto this bill as well.

The council decided to reduce the size of the relief package, which will be funded by drawing down two city reserve funds, in recognition of a City Budget Office forecast released Monday that increased the size of this year’s projected shortfall by $26 million. Only Kshama Sawant voted against the new relief package, calling it an “austerity” bill that amounted to a huge “budget cut.”

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The veto override needed six votes to pass. One potential “no” vote, Debora Juarez, is excused from council all this week; she also missed Monday’s vote to adopt a midyear budget that included cuts to the Seattle Police Department. Andrew Lewis and Alex Pedersen both voted to sustain the mayor’s veto.

Pedersen said he was motivated, in part, by the concern that the city would be forced to lay off workers next year if the council spends too much money now. Lewis said he believed that the only way to “make a deal” with Durkan would be to uphold her veto and spend the next week and a half working “collaboratively” to come up with a proposal the mayor would be willing to support.

“The mayor, from her position, has made clear that she is not going to spend this money,” Lewis said. “She is going to continue to push back until there is a broader accommodation.” The “broader accommodation” Lewis referred to was apparently contingent on the council either letting the mayor’s veto stand without a vote and passing new legislation (which would mean no further discussion of the veto or the original bill) or upholding the mayor’s veto, as several council members made clear in their comments.

Council president Lorena González, for example, said she had spent hours on the phone with the mayor and her staff over the past week trying to come up with a compromise that Durkan would accept, but that Durkan was hung up on making sure that her veto stood. “Unfortunately, we were not able to come up with an agreement because… there was an insistence on the sustainment of the veto before we could agree to a number,” González said. The money, in other words, wasn’t the main issue—the veto was.

In a statement, Durkan said that in “the spirit of the collaboration, I proposed creating a new bill and an agreed spending and priorities plan to ensure the City could actually implement tens of millions of additional assistance in 2020 and 2021, while continuing to have resources to address our growing budget gap and any emergencies. Council chose to reject that proposal and take a different path.”]

Even if she doesn’t veto the legislation, Durkan is under no obligation to actually spend the money the council has allocated. (We covered this fact, and the history of council-mayor budget cooperation, in a recent post about the council’s efforts to eliminate the Navigation Team.)

The legislation recognizes this fact, in a roundabout way, in a new paragraph acknowledging that “direct relief to the community may take time and could result in not expending the full $57 million in 2020. If the full amount is  not expended in 2020, the Council is committed to working with the Executive to continue funding these critical COVID-19 relief programs in 2021 and to address newly identified 2020 revenue shortfalls.”

Council Takes a Small Bite Out of Police Budget As New Forecast Predicts Even Bigger Shortfall

This post originally appeared at the South Seattle Emerald.

By Erica C. Barnett

Advocates for an immediate 50 percent cut to the Seattle Police Department’s budget may have walked away unsatisfied Monday evening, when the city council passed a midyear budget package that lopped just 7 percent off SPD’s remaining 2020 budget. But the council majority left no question that they consider the short-term cuts a down payment on a more substantive proposal next year—one that, importantly, has a shot of making it through labor negotiations with the powerful police officers’ union.

The budget would eliminate the equivalent of 100 full-time officers through a combination of layoffs and attrition. The council made requests for specific layoffs—zeroing in, for example, on the Navigation Team, the mounted patrol, and the sworn portion of SPD’s public affairs office—but they have no power to actually dictate how the police department spends it budget, which is why no “defund the police” proposal (short of eliminating the department altogether) actually requires the chief to spend her budget in the way the council wants.

As a result, the rhetoric around the council’s cuts has often been far more heated than the modest changes suggest.

Council member Kshama Sawant, who cast the lone “no” vote against the rebalancing package (Debora Juarez was absent), accused her colleagues of passing an “austerity budget” that “fails working people” because it did not include her version of the so-called “Amazon” (payroll) tax. (Budget chair Teresa Mosqueda’s retort: “No one is siding with Jeff Bezos.”)

Mayor Durkan, who has held numerous press conferences to denounce the council majority’s more modest plan, issued a statement after the vote saying it was “unfortunate Council has refused to engage in a collaborative process to work with the Mayor, Chief Best, and community members to develop a budget and policies that respond to community needs while accounting for – not just acknowledging – the significant labor and legal implications involved in transforming” SPD.

The package of bills adopted Monday would also:

• Express a commitment to creating a new a civilian-led Department of Community Safety & Violence Prevention by the end of next year—a proposal Sawant mocked as “resolution to hope to study defunding the police”;

• Start the process of civilianizing the 911 system by putting a civilian director and deputy director in charge of the 911 call center (which is already run by non-sworn SPD personnel);

• Reallocate funding that Durkan originally allocated for an expansion of probation to community groups working to mitigate the impact of COVID-19 on vulnerable populations;

• Cut the salaries of SPD’s command staff (with the exception of Best, who would see her $294,000 salary reduced by less than $20,000);

Allocate $1.7 million to non-congregate shelter, through a proviso that would prohibit Durkan’s Human Services Department from spending the money on any other purpose

• Empower the Law Enforcement Assisted Diversion program to enroll new clients into its Co-LEAD program, which has been held up by the executive branch for months, without SPD participation; and

• Earmark $17 million for community organizations working to create new systems of community safety outside the police department.

• Move millions of dollars from levy funds that were supposed to pay to expand programs or create new ones to pay for the ongoing operations of city departments, such as the Seattle Department of Transportation and the Department of Education and Early Learning;

The changes adopted Monday amend Mayor Durkan’s original budget-balancing proposal, which relied heavily on a hiring freeze, emergency funds, federal grants, and levy dollars that had been allocated for other purposes to close an anticipated shortfall of more than $200 million. On Monday morning, just minutes before the weekly council briefing meeting, the mayor’s office distributed a memo from CBO director Ben Noble projecting an additional revenue shortfall of $26 million this year alone.

Near the end of almost eight straight hours of budget discussions, council member Lisa Herbold said she wanted to state for the record that “we as a council and the mayor’s office are in a really unique position to seize upon a moment in the city and in this country” by taking seriously community demands to redefine public safety and defund the police. “I am hopeful that we are more aligned in our desire to do that than it has appeared in the last two weeks.”

That hope seems optimistic. In adopting the midyear budget Monday, the council rejected Durkan’s proposal to discard the historical practice of two-year budgeting, demanded a report that would provide more transparency into how SPD is actually spending its budget, and prepared to overturn Durkan’s veto of a COVID relief plan that would temporarily drain the city’s emergency reserves until they can be replenished with funds from the new payroll tax that goes into effect in 2022. The council will start the whole process over again next month, when the mayor proposes her 2021 budget.

Battle Over Budget Transparency Illustrates Deeper Rifts Between Seattle Mayor and Council

It’s probably another sign of the frayed relationship between most members of the Seattle City Council and Mayor Jenny Durkan that the big meta-budget dispute playing out in council chambers right now is how much the mayor and her budget office know about the details of midyear cuts the mayor is proposing and how much they’re telling the council, which has to approve a final package of midyear budget cuts based on more than a dozen pieces of legislation the mayor sent them earlier this month.

Yes, how much to cut the police department (and whether the mayor’s proposed “cuts,” for this year and next, are meaningful or merely cosmetic) remains the most pressing single budget issue. But the cuts the city has to make this year—and then replicat and expand in 2021—are largely in other departments that aren’t currently in the headlines, and the debate over the mayor’s proposals is also a debate about discretion and how much of the budget is actually on the table for the council to tinker with.

On Thursday morning, city council central staff director Kirsten Arestad said central staff will develop a new budget tool—essentially, a balancing worksheet—that will show exactly what is in the mayor’s midyear budget-cutting package, including “administrative cuts” the mayor has made that are not reflected in the legislation she sent to the council. The tool will also take a baseline forecast (the June revenue forecast, which added another $11.4 million deficit to the May forecast on which Durkan’s balancing packaged is based) and use it as the basis of the balancing package. The worksheet will also indicate more clearly the gap between revenues (including COVID-related federal funding) and expenditures (including unanticipated costs related to the pandemic), Arestad said.

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One reason all this extra work is necessary, according to Arestad, is because not all of the cuts Durkan made to the budget show up in the legislation she sent the council, which only includes cuts the council has to act on, making it “difficult to clearly see the full picture” of the budget and “almost impossible for individual council members to determine, as they’re making amendments, ‘Where can I take money, is this being double counted, how does this impact other fund balances, the levy exchanges, how we dip into the emergency funds, and so forth’.”

The budget office doesn’t see it this way. They say they have provided all the information the council has asked for—including not just specific line-item cuts but a list of cuts the mayor considered and rejected (scroll down)—and that the disagreement is actually more fundamental than a simple question of transparency. “We did not and were not intending to send down an entire new budget proposal,” budget director Ben Noble says, or relitigate the entire 2020 budget. But that, he argues, is exactly what the council is trying to do.

So why is this debate ultimately more illustrative than substantive? For one thing, a council that had a healthy relationship with the mayor could have communicated their confusion and need for more information behind the scenes, instead of having the director of Central Staff read a letter for the record; and a mayor who had a healthy relationship with the council could have figured out what information the council wanted and figure out a way to provide it, instead of sending down a dozen pieces of legislation that included gaps that were sure to frustrate a council primed to look for budget trickery.

The second reason this debate is largely symbolic is that the line items the council wants to add (and make up for by cutting from other parts of the budget) are—again, setting the police budget aside—relatively minor strictly from a spending perspective, and many of them will depend on departments (which answer to the mayor) agreeing to voluntarily start the hiring process this year for positions that have been frozen since March, at the risk of having to lay them off at the beginning of next year. Continue reading “Battle Over Budget Transparency Illustrates Deeper Rifts Between Seattle Mayor and Council”

“We Just Can’t Do It.” Seattle Debates Moving Homeless People From Hotels Back to Mass Shelter

Daniel Malone, the director of the Downtown Emergency Service Center, is insistent: The 200 or so men and women living in a Red Lion hotel in Renton since the COVID-19 pandemic began can’t go back to DESC’s main building downtown—not now, not ever.

“We definitely can’t just take all of those people and move them back to the main shelter at the end of August,” when the contract for the Red Lion ends, he says. “We just can’t do it.” DESC’s congregate shelters, which provide basic shelter in bunk beds for 383 people, serve some of the most medically vulnerable men and women in the city, and are “not in keeping with public health guidelines for [bed] spacing” during the pandemic, Malone says.

DESC hopes to purchase three motels, each with about 130 rooms, to permanently shelter those 383 people, and to put the Morrison Hotel—the historic Pioneer Square building that houses the organization’s main shelter, along with 190 units of permanent supportive housing—to other uses. If funding for this plan doesn’t come through, Plan B is returning about half of those people to reconfigured shelters at higher cost per bed than motels.

“We definitely can’t just take all of those people and move them back to the main shelter at the end of August. We just can’t do it.” —Daniel Malone, Downtown Emergency Service Center

“On a per-person basis, you’d end up spending a lot more to reuse the older facilities, because you’d have fewer people in them— and then, of course, you’d have just far fewer beds,” Malone says.

Several other shelter providers have moved people into hotels in response to the COVID-19 pandemic, including the Salvation Army and Catholic Community Services. These groups will face a similar debate when funds for hotel rooms start running out.

COVID-19 outbreaks within the homeless population have been most common in mass shelters where people sleep a few feet apart and share common areas, restrooms, and other facilities. According to the King County Public Health department, which monitors an incomplete list of about 50 shelters around the county, most reported cases of COVID-19 among the county’s homeless population have occurred in congregate shelters, bolstering the argument for individual rooms. And with the World Health Organization reporting that COVID-19 can spread through the air in indoor settings, the argument for eliminating mass shelters, like the ones the city of Seattle has opened in community centers and public buildings to “de-intensify” existing shelters, is compelling.

City council budget chair Teresa Mosqueda said last week that she was “frustrated” that Mayor Jenny Durkan’s request for federal funding for COVID-19 response did not include funding for additional beds in non-congregate settings, such as hotel rooms or dorms. Instead, the requests so far would pay for existing shelter beds that were funded through the original 2020 budget, which is facing significant midyear cuts.

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“I didn’t think we could be any more clear, from the council’s perspective, that non-congregate settings are a priority for us,” Mosqueda told city budget director Ben Noble during a briefing last week. “About three weeks, ago I said from the conversations that we were having with people who are providing direct services to the houseless, they are very fearful that they are just weeks from where the long-term care facilities were in the very beginning.

“What other types of funding are we looking into to create non-congregate shelters?” she asked “I’m still frustrated that we don’t have that answer from [the Human Services Department.”

Durkan has resisted proposals to fund non-congregate shelter options like hotels during the pandemic, despite ample evidence that not only do separate spaces prevent COVID-19 from spreading but have tremendous physical and psychological benefits to people accustomed to fighting over space, food, and showers in overcrowded congregate settings. (The Red Lion, for which the city provides some funding, has not had a single case of COVID-19).

“If the question is what happens in two or three months, more people will be alive [because] fewer people will have contracted COVID. Quite literally, that is how we will save lives.”—City Council member Teresa Mosqueda

“I think we need to be conscious of the sustainability of whatever system we set up,” Noble said last week. “The COVID pandemic isn’t going to disappear by any means… and I think there are difficult decisions to be made about how well we can manage some level of congregate shelter … versus moving folks singularly into non-congregate settings, and part of that is making sure we have sufficient and robust testing in these settings.”

“If the question is what happens in two or three months, more people will be alive [because] fewer people will have contracted COVID,” Mosqueda shot back. “Quite literally, that is how we will save lives.”

Malone, from DESC, says that for the hundreds of people who are supposed to leave their hotel rooms at the end of August, the future remains “very uncertain.” He’s hopeful that the county, which secured the hotel for DESC in the first place, will come through with some capital and operating funding for their longer-term proposal, and has shown the city some preliminary figures for what it would cost to operate both the motels and mass shelters at half their previous capacity.

“There are lots of people from different quarters who are enthusiastic about this idea, and that makes me think we would have a shot at pulling the resources together,” Malone says. “I just don’t feel the door is shut on this.”

“Pursuing this strategy of going to individual rooms is the way to go,” he continues, “and even if we got to the end of this epidemic in the future, that would still be a better way to do it.”

Lawyers, Car Dealerships, Burger Joints, Newspapers, and Strip Clubs: Which Seattle Companies Got Federal Loans

COVID-19 Relief Series, Part 2: Paycheck Protection Program ...

 

The Small Business Administration has published a list of the companies that received Paycheck Protection Act loans of more than $150,000, including thousands of Seattle-based for-profit companies, nonprofits, and religious institutions. (The low-interest loans convert into grants if they are used primarily to retain staff who might otherwise be laid off). The local list, which I’ve compiled into a Google spreadsheet, includes a wide range of companies, from large law firms to newspapers to Catholic schools to nonprofits.

The Small Business Administration, which administered the loans, lists loans as ranges, so I have described each loan as being “up to” the higher end of the range. You can download the full spreadsheets of loans over and under $150,000 on the SBA website; note that the list of loans under $150,000 does not contain business names or detailed business categories.

I took a look at the list of Seattle companies and put together a highly unscientific, non-comprehensive guide to highlights, lowlights, and oddities.

• As the New York Times and others have pointed out, large law firms, lobbyists, and car dealerships were among the biggest “small-business” loan recipients nationwide, and Seattle was no exception. Law firms receiving big payouts in Seattle include Foster Garvey (formerly Foster Pepper), which received as much as $10 million; Schroeter, Goldmark, & Bender (up to $2 million) and Stokes Lawrence (up to $2 million). Local mega-consulting form Strategies 360 received up to $5 million. And Bill Pierre Ford (up to $2 million), Carter Motors, and Freeway Motors (up to $5 million each) were just three of the 20 Seattle car dealerships that received federal loans, a number that does not include the much higher number of dealerships just outside city limits.

The owners of the McDonald’s at Third and Pine, a corner that has seen many shootings over the years (most recently in February, when a mass shooting killed one and injured seven), also received a loan of up to $5 million.

• Several local media companies received PPP loans, including the Seattle Times (which reported earlier this month that it had received nearly $10 million), the Stranger (which has not disclosed its loan of up to $2 million, and continues to solicit small donations from readers, saying they’ve lost more than 90 percent of their revenue), the Daily Journal of Commerce (which received up to $1 million) and Sagacity Media, which owns Seattle Met Magazine and received up to $2 million. Cascade Public Media, the umbrella nonprofit for KTCS 9 and Crosscut, also received up to $2 million.

• For reasons that are unclear, Red Mill Burgers, which is owned by two white siblings, listed itself as a Black-owned business, according to the SBA. (The racial designation is optional, and does not confer any particular advantage.) Red Mill was in the news several years ago after owner John Shepherd got in trouble for making sexist and transphobic comments and sharing transphobic cartoons. Specifically, he “stepped down” from his “role” at the company—without actually relinquishing control—after calling female city council members “bitches” for voting against a sports arena and posting transphobic memes on Facebook. Shepherd remains an active commenter on the anti-homeless Safe Seattle Facebook page. Red Mill received between $100,000 and $350,000.

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• Restaurants, which (along with hotels) were hard-hit by stay-at-home orders, ranked high among recipients of large and mid-range loans. Some notable beneficiaries include Duke’s Chowder House (up to $5 million); the Daily Dozen Doughnuts stand in Pike Place Market (up to $5 million); Matador, with branches in West Seattle and Ballard (up to $5 million); Salty’s, a seafood restaurant on Alki Beach (up to $5 million); two franchise branches of Din Tai Fung, the Taiwanese restaurant chain (up to $2 million); Renee Erickson, who owns nearly a dozen local sea creature-themed restaurants (up to $5 million); and the ultra-spendy Queen Anne destination restaurant Canlis (up to $2 million); and Dick’s Drive-Ins (up to $5 million).

Various business entities associated with restaurateur Tom Douglas, who shuttered all of his restaurants and laid off hundreds of employees in early March, will collectively receive loans of up to $4.35 million. The restaurants include some that are still open, such as the Palace Kitchen, Dahlia Lounge, and Serious Pie, as well as two that Douglas has closed permanently, Brave Horse Tavern and Cuoco. According to the SBA database, Douglas’ claimed that the federal loan of up to $1 million would allow Terry Avenue Restaurants, the corporate name for the two shuttered restaurants, to retain 92 jobs.

The owners of the McDonald’s at Third and Pine, a corner that has seen many shootings over the years (most recently in February, when a mass shooting killed one and injured seven), also received a loan of up to $5 million.

Rounding out the list of local burger chains, Kidd Valley and Burgermaster each received loans of up to $1 million.

Five corporations associated with Deja Vu strip clubs, not all of them incorporated in Washington State, showed up on the list and received a total of up to$5,350,000.

Some of the restaurateurs who will benefit from federal largesse have been in the news previously for stiffing workers or expressing anti-tax or anti-government views. Douglas, who just announced he will permanently close two of his restaurants near the Amazon campus, was among the most vocal restaurant-industry opponents of the “head tax” last year, and had to pay out a $2.4 million settlement for underpaying his employees last year. Dick’s Drive-Ins also came out against the tax, and its executive vice president, speaking on behalf of the company, suggested that charitable giving by individuals should replace government support for homeless services.

• A large number religious institutions (which are not taxed) received significant loans, among them the Corporation of the Catholic Archbishop of Seattle (up to $5 million), the Diocese of Olympia (up to $1 million), St. Anne’s Church on Queen Anne (up to $1 million), and about three dozen other churches or religious organizations. Private schools, many of them run by religious denominations, also received dozens of loans; Holy Names Academy (up to $2 million), St. Joseph School (up to  $2 million), and O’Dea High School, for example, received loans, as did private schools like Morningside Academy (up to $350,000) and charter schools like Summit Public Schools and Villa Academy (up to $2 million each).

The libertarian, anti-government Washington Policy Center—which rails against expansion of government programs to help vulnerable people and advocates for “free-market solutions” over government “handouts”—accepted a federal handout of up to $1 million.

• Local nonprofits that help people experiencing homelessness and food or housing insecurity also received loans to continue doing their work at a time when direct assistance has been especially critical. On the long list are Food Lifeline (up to $2 million), Solid Ground (up to $5 million), the Chief Seattle Club (up to $350,000), the Lighthouse for the Blind (up to $10 million), Asian Counseling and Referral Service (up to $5 million) and El Centro de la Raza (up to $2 million).

• Five corporations associated with Deja Vu strip clubs, not all of them incorporated in Washington State, showed up on the list and received a total of up to $5,350,000. According to the SBA, the five Seattle-based entities employ nearly 400 people.

One, Bijou-Century LLC, is registered in Nevada and owns a strip club in San Francisco that has been the source of several high-profile legal disputes, including a lawsuit against the software company Oracle over an unpaid five-figure tab. Another, S A W Entertainment Ltd., is associated with the Hustler and Condor strip clubs (both Deja Vu-affiliated) in San Francisco. The listed location for both entities is at 1510 1st Ave., the location of Fantasy Unlimited/Deja Vu Showgirls, but neither company is registered in Washington. And two more Deja Vu affiliates—BT California, which runs the Penthouse Club in San Francisco, and Deja Vu San Francisco LLC—are both listed at an address on Eastlake Ave. E. that is not the site of any strip club.

Only Seattle Amusement Co., also located at 1510 First Ave., is an actual Washington State corporation—it’s owned, along with the rest of the building that houses the Showbox nightclub, by local strip club magnate Roger Forbes, who started the Deja Vu company with Larry Flynt in 1985. The byzantine accounting (and the sleuthing required to find out where all these “Seattle” LLCs are registered) speaks to the difficulty of tracking where all the loans are going, even with the benefit of spreadsheets and the Internet. For what it’s worth,

Finally, the libertarian, anti-government Washington Policy Center—which rails against expansion of government programs to help vulnerable people and advocates for “free-market solutions” over government “handouts”—accepted a federal handout of up to $1 million.

Gaming Out the Latest “Amazon Tax” At the Start of an Unprecedented Recession

Let’s start out by stating the obvious: Barring a miracle, the “Amazon Tax” proposed by Seattle council members Kshama Sawant and Tammy Morales will not become law in its current form. The bill, which the council will continue discussing into next month, would slap a 1.3 percent payroll tax on companies with more than $7 million in payroll expenses, raising more than $500 million a year from about 800 Seattle companies.

Sawant and Morales decided to designate the bill as an “emergency,” which makes it invulnerable to a future voter referendum; the tradeoff is that they need 7 votes for approval, plus the support of Mayor Jenny Durkan, since the city charter requires mayoral approval of all emergency legislation. In other words, even if Morales and Sawant got five other council members on board—unlikely, if comments at Wednesday’s budget committee from council members who are ordinarily sympathetic to tax-the-rich arguments are any indication—the mayor could simply let the proposal die without a formal veto. Durkan fought Sawant’s last effort to “tax Amazon,” a $275-per-employee tax on employees of companies with gross receipts of more than $20 million, and is implacably opposed to this one as well.

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During this unprecedented time of crisis, your support for truly independent journalism is more critical than ever before. The C Is for Crank is a one-person operation supported entirely by contributions from readers like you.

Your $5, $10, and $20 monthly donations allow me to do this work as my full-time job. Every supporter who maintains or increases their contribution during this difficult time helps to ensure that I can keep covering the issues that matter to you, with empathy, relentlessness, and depth.

If you don’t wish to become a monthly contributor, you can always make a one-time donation via PayPal, Venmo (Erica-Barnett-7) or by mailing your contribution to P.O. Box 14328, Seattle, WA 98104. Thank you for reading, and supporting, The C Is for Crank.

There is also some question whether the proposal complies with an emergency order issued by Gov. Jay Inslee in March, and extended this week, barring public agencies from adopting or discussing legislation unless it’s “routine” or “necessary to respond to the COVID-19 outbreak and the current public health emergency.”

Despite all that, it’s still worth taking a look at the legislation, which dwarfs the “head tax” the council passed in 2018, then overturned, by a factor of more than ten. What would happen if, against all apparent odds, the bill were to pass in its current form?

In its first year, 2020, the legislation would fund cash payments of $2,000 over four months to 100,000 low-income Seattle residents to respond to the COVID crisis. (This is the part of the bill most obviously compliant with Inslee’s order). Because revenues from the tax wouldn’t be available until 2021, the bill would fund these checks by taking a short-term loan from six city funds that, according to a companion bill, have “sufficient cash” to contribute up to $50 million each. Those funds would be paid back in 2021, plus $5 million interest.

From then on, assuming all the assumptions that went into the proposal remain correct, the tax would pump more than $500 million a year into funding for “social housing” for people making between 0 and 100 percent of the Seattle median income, operational support for permanent supportive housing, and funding to implement the Green New Deal, which includes strategies like weatherization and converting buildings from gas to electric heat. The amount of funding from the tax would be less, of course, if the number of businesses spending more than $7 million annually on payroll declined because of the recession.

Even if the legislation is safe from any future referendum, it would still be subject to lawsuits, and there’s no guarantee that litigation over the tax would be resolved quickly, or in the city’s favor.

The $200 million “interfund loan” would come from six voter-approved levies and taxing districts, including the Move Seattle levy; the Families and Education Levy; the Seattle Parks District; and the Library Levy. Some of these funds do have “sufficient cash” to give up $50 million in the short term, but it’s worth taking a look at why that is, and how this might impact their ability to fund promised projects.

The Low Income Housing Fund, which receives money from the Housing Levy and payments from developers through the Mandatory Housing Affordability program, has more than $146 million on hand because property taxes have continued to flow in to fund future projects that are not yet off the ground. That money is in the city’s “bank,” but it’s already spoken for. Other funds, such as the Library Levy Fund, the Move Seattle Fund, and the Parks District Fund, have significantly less than $50 million lying around. The Parks District fund, in fact, is actually in the red; the 2020 budget makes up a $6 million shortfall with an interfund loan, to be repaid as more revenues come in. Some of these funds simply aren’t that big to begin with—the library levy, for example, is supposed to raise just over $200 million, total, over seven years,

None of that might matter if the $200 million could be repaid in just one year as proposed. But even if the legislation is safe from any future referendum, it would still be subject to lawsuits, and there’s no guarantee that litigation over the tax would be resolved quickly, or in the city’s favor. If funding from the tax didn’t come through quickly, or ever, it’s unclear how the $200 million would be repaid. If, say, the Library Levy found itself short $50 million, that could significantly impact the library’s ability to provide services promised to voters—especially as the recession eats into the city’s tax base.

There are also other interests competing for that money. As city budget director Ben Noble noted in his grim revenue forecast presentation Wednesday, the city may have to dip into some of the dedicated levy funds to pay for basic services—using the parks levy to fund basic maintenance instead of new capital projects, for example. “If the base levels of funding for which the levies were intended to be additive are no longer feasible, the question is whether it would make sense to use the levy funds for operational purposes,” Noble told the council Wednesday. Continue reading “Gaming Out the Latest “Amazon Tax” At the Start of an Unprecedented Recession”

With Public Meetings Shut Down, Housing Developers Seek Temporary Relief from Seattle Process

The Standard towers in the University District, one of dozens of projects caught in limbo when COVID-19 led to the cancellation of all public meetings.

Nonprofit affordable housing providers and other developers were alarmed when a proposal from Mayor Jenny Durkan’s office that would make it possible for their projects to move forward during the COVID crisis was abruptly removed from this week’s city council agenda. The legislation would allow projects to go through the shorter “administrative” design review process, in which projects are reviewed and approved by trained city staff, instead of the usual “full” design review, which involves public meetings and sometimes-lengthy deliberations. Similarly, the city’s Historic Preservation Officer would be empowered to approve or deny changes to landmarked buildings for six months.

The changes would last for six months, or until the city has developed a system for design-review and landmarks board meetings to take place online. Without a process for projects to move forward, land-use attorney Jack McCullough says, a lot of planned developments could be “dead in the water.”

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During this unprecedented time of crisis, your support for truly independent journalism is more critical than ever before. The C Is for Crank is a one-person operation supported entirely by contributions from readers like you.

Your $5, $10, and $20 monthly donations allow me to do this work as my full-time job. Every supporter who maintains or increases their contribution during this difficult time helps to ensure that I can keep covering the issues that matter to you, with empathy, relentlessness, and depth.

If you don’t wish to become a monthly contributor, you can always make a one-time donation via PayPal, Venmo (Erica-Barnett-7) or by mailing your contribution to P.O. Box 14328, Seattle, WA 98104. Thank you for reading, and supporting, The C Is for Crank.

“If we have to tell everyone who’s in the pipeline or ready to get in, ‘We can’t tell you when you’ll ever be able to move forward,’ people will mothball their projects. They may not kill them, but they’re going to say, ‘If there’s not a path, why am I spending money money on this?”

The council was prepared to adopt the proposal on Monday, but after an executive session at which the city’s law department reportedly expressed concerns that it could open up the city to appeals to the state Growth Management Board, the legislation was yanked from the agenda. (City council president Lorena Gonzalez was unable for comment Thursday, and a city council spokeswoman did not return a call.) On Thursday, after both for-profit developers and low-income housing builders raised a ruckus, it’s back on next week’s agenda.

The city’s eight design review boards are supposed to ensure that their designs are high-quality, comply with regulations, and are appropriate for the neighborhoods where they’re being built. (This process, of course, can be quite contentious and subjective.) Twenty-nine projects, totaling 3,500 new housing units, were supposed to get hearings between March 11 and May 4, according to the city’s Department of Construction and Inspections, and another 30 were starting the community outreach process that precedes design review.  SDCI spokesman Bryan Stevens says many of these projects will provide affordable housing funds through the city’s Mandatory Housing Affordability Program or include affordable units through the Multifamily Tax Exemption program. The 30 projects that were just starting out include four affordable-housing buildings.

Chris Persons, the head of Capitol Hill Housing, says he has two projects in the development pipeline, including one that requires approval by the landmarks board. “It’s stuck, but it could be resolved by this legislation,” Persons says. Continue reading “With Public Meetings Shut Down, Housing Developers Seek Temporary Relief from Seattle Process”

Worker Benefits Expanded, Sweeps Suspended For Now, Navigation Team’s Future In Doubt

Ballard Business District, March 17, 2020

1. Governor Jay Inslee did not announce a statewide order to shelter in place on Wednesday afternoon, nor did he the bait when a reporter asked him whether he planned on doing so later this week. Instead, at a press conference in Olympia that was broadcast statewide, with reporters participating by teleconference, Inslee said he was issuing several new orders to ease the financial burdens the COVID-19 outbreak has placed on renters, small business owners, and workers statewide.

“My dad used to tell me, when you’re going through hell, keep going,” Inslee said, before announcing his latest statewide COVID financial relief package, which includes: 

• A statewide moratorium on evictions for residential tenants who are unable to pay their rent. Unlike a similar temporary eviction ban in Seattle, the statewide moratorium leaves some leeway for landlords to evict tenants for other reasons. “We just can’t have a big spike in homelessness … with this epidemic raging,” Inslee said. Inslee spokesman Mike Faulk said that the order left room for landlords to evict tenants who were engaged in criminal activity or creating environmental hazards, for example.

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During this unprecedented time of crisis, your support for truly independent journalism is more critical than ever before. The C Is for Crank is a one-person operation supported entirely by contributions from readers like you. Your $5, $10, and $20 monthly donations allow me to do this work as my full-time job. Every supporter who maintains or increases their contribution during this difficult time helps to ensure that I can keep covering the issues that matter to you, with empathy, relentlessness, and depth. If you don’t wish to become a monthly contributor, you can always make a one-time donation via PayPal, Venmo (Erica-Barnett-7) or by mailing your contribution to P.O. Box 14328, Seattle, WA 98104. Thank you for reading, and supporting, The C Is for Crank.

• A waiver of the usual one-week waiting period before people can receive unemployment benefits, retroactive to March 8, when Inslee expanded eligibility for unemployment to part-time workers. Inslee said today that he is waiting for the White House and Congress to declare a federal disaster in Washington State, making more employees, as well as some independent contractors, eligible for unemployment.

Employment Security Department commissioner Suzi LeVine said unemployment claims were up 150% last week, and claims for shared work arrangements (where people go to part time but also get unemployment) have spiked 500%. “There has been a tsunami of demand,” LeVine said.

• Small grants to small businesses that have been impacted by the epidemic, plus tax relief for businesses that are unable to pay their taxes on time, retroactive to February 29. This will include interest waivers and the suspension of tax liens and forced collections by seizing bank accounts.

• The extension of Emergency Family Assistance (cash assistance) eligibility to families without children.

“Because of our living situation, we’re probably a little bit less susceptible [to COVID-19] than a lot of the general public.” — Steve, who lived in a trailer that was towed away by the Navigation Team last week

2. Yesterday, after declining to respond to questions from reporters about whether the Navigation Team planned to continue removing encampments and disposing of homeless people’s belongings during the pandemic, the city’s Human Services Department put up a blog post announcing the suspension of most sweeps, except in an “extreme circumstance that presents a significant barrier to accessibility of city streets and sidewalks, and is an extraordinary public safety hazard.”

HSD spokesman Will Lemke said examples of an extreme circumstance would include any encampment that is “blocking the entire sidewalk, prohibits access to a facility, or is a public safety danger to occupants and/or greater community.”

A spokeswoman for the mayor says that both the Navigation Team and other city staffers authorized and trained to remove encampments on their own, such as community police officers and some parks employees, will abide by the moratorium. The blog post included a detailed itemization of the number of hygiene kits the city has distributed, the number of sites the team has visited, and the number of flyers about COVID they have handed out. But when it came to the number of encampments that have been removed since the beginning of March, when several people in the Seattle area had already died from the virus, the blog post said simply that they were “limited.”

Asked for a more specific number, the mayor’s office responded that the city removed just 15 encampments that were deemed “obstructions,” total, between March 1 and March 17.

3. I found out about one of those 15 removals on March 11, when Bailey Boyd, a North Seattle resident, took photos of its what was left after the Navigation Team towed away a trailer that was parked on the street near her home and posted them on Twitter. Boyd said and her roommate watched as the team tossed all of the items inside the trailer onto the street, where many of them remained until the couple who had been living there moved to a different location.

Source: Alliance for a HealthY Washington

“I went and got coffee in the morning, and when I came back, there was a squad car and another car there and the Navigation Team was going through all their stuff and throwing it on the ground,” Boyd said. “Then they brought a tow truck in and towed the trailer, and they just left all of their stuff on the side of the road.”

One of the two people who had been living in the trailer, whose first name is Steve, said the Navigation Team told him they could call a shelter for him and his girlfriend, who is disabled and uses a cane, and see if they had space. Steve says he told them not to bother. “I’m not going to a shelter. I’m with my girlfriend and I’m not going to split up from her,” he said. He also wants to avoid close contact with potentially infected people—something he doesn’t have to deal with living in a trailer. “Because of our living situation, we’re probably a little bit less susceptible than a lot of the general public,” he said.

Another issue, for Steve and his girlfriend, is that they don’t want to lose all their personal items—something Steve said has happened to him repeatedly after the Navigation Team has made him move. According to the city, the Navigation Team places all personal items removed from encampments in storage for a minimum of 70 days. However, according to the “site journals” posted on the city’s encampment abatement page, which has not been updated since the end of January, the last time the Navigation Team stored any property at all was last October.

4. This year’s city budget will need to be cut dramatically to deal with the economic impact of the COVID epidemic. Last week, the head of the city budget office, Ben Noble, estimated that the budget could take a $100 million hit. One place council members may look for savings is the Navigation Team, which has been expanded every year since Mayor Jenny Durkan took office in 2017. The team, at 38 members, now costs the city $8.4 million a year.

District 2 council member Tammy Morales, who vowed during her campaign to “stop the sweeps,” told me this week that the council had already started looking at the team’s budget before the current crisis hit. “Even before this emergency, our office was working to stop the sweeps,” Morales said. Expect the council to take a critical lens to the program once the dust settles and it’s clear how much the city has to cut.